Protecting Yourself Against Mortgage Scams

More and more reports of fraudulent companies scamming innocent homeowners pour into the office of the Federal Trade Commission each day. As the economy continues to batter the housing market and mortgage lending industries, more companies are popping up to capitalize on the misfortunes of unsuspecting homeowners. The number of “foreclosure alternatives” and “mortgage relief” scams are on the rise, but you don’t have to fall victim to such actions. Learn how to spot legitimate help from those looking to make an easy dollar off of struggling homeowners.

Take Caution

While many legitimate mortgage relief companies require a fee for their services, be wary of any that require upfront payment for services that have not been rendered. You should never pay for a service that has not been performed and any company that requests you to pee-pay should be considered a red flag.

Like the old saying goes, if it seems too good to be true it probably is. The same is true for companies offering help with foreclosure. Remember that only your lender can stop a foreclosure, so any company that “guarantees” they can save your home should be reviewed cautiously.

Suspicion should arise when dealing with a company that coaches you to stop paying your mortgage. If you stop making payments, your lender is guaranteed to continue the foreclosure process. Similarly, companies that offer to pay your mortgage payments on your behalf should be considered suspicious. Many people find out the payments were never made because they allowed someone to mediate their payments for them.

Green Means Go

The most important thing to remember when attempting to resolve mortgage debts is that the lender and borrower should be in direct contact at all times. Never cease communications with your lender, even if you agree to let a third party mediate your interactions or payments.

Continue paying your payments. If you agree to any loan modifications, make sure they come with written approval directly from your lender.

If you need assistance with foreclosure or mortgage debts, seek counsel from a foreclosure attorney or other legal entity. In general, it is harder to spot legitimacy issues with non-legal third party companies.

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